Sales tax liability for gunnies turned on whether an express or implied sale agreement existed and needed fresh factual examination.

Where the Supreme Court has modified the controlling precedent on sales tax liability, the factual basis for applying the charging provision must be re-examined before final assessment. The turnover relating to gunnies could not be finally treated without verifying whether there was an express or implied agreement for their sale, because that factual issue determines whether section 6-C of the Andhra Pradesh General Sales Tax Act, 1957 applies. The matter was therefore remitted to the Tribunal for fresh examination in the light of the Supreme Court decision, with liberty to raise the contention concerning the portion of turnover taxed under the Central Sales Tax Act, 1956.

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Issues: Whether the turnover relating to gunnies required reconsideration in the light of the Supreme Court decision and whether the matter should be remitted to the Tribunal for examination of the factual basis for applying section 6-C of the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: The assessment year was 1981-82. The assessing authority had exempted the turnover relating to gunnies, while the revisional authority applied section 6-C and taxed that turnover at the same rate as the contents. The Tribunal had followed earlier High Court precedent, but that precedent had since been explained and modified by the Supreme Court. In that situation, the factual question whether there was an express or implied agreement for sale of gunnies had to be verified before the correct tax treatment could be determined.

Conclusion: The matter was required to be remitted to the Tribunal for fresh examination in the light of the Supreme Court decision, with liberty to raise the contention regarding the effect of the portion of turnover taxed under the Central Sales Tax Act, 1956.

Ratio Decidendi: Where a controlling precedent on sales tax liability has been modified by the Supreme Court, the factual basis necessary for applying the charging provision must be re-examined before the turnover can be finally assessed.

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